Correlation Between Hyundai and Cadogan Petroleum
Can any of the company-specific risk be diversified away by investing in both Hyundai and Cadogan Petroleum at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Hyundai and Cadogan Petroleum into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hyundai Motor and Cadogan Petroleum plc, you can compare the effects of market volatilities on Hyundai and Cadogan Petroleum and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Hyundai with a short position of Cadogan Petroleum. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hyundai and Cadogan Petroleum.
Diversification Opportunities for Hyundai and Cadogan Petroleum
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Hyundai and Cadogan is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Hyundai Motor and Cadogan Petroleum plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cadogan Petroleum plc and Hyundai is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Hyundai Motor are associated (or correlated) with Cadogan Petroleum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cadogan Petroleum plc has no effect on the direction of Hyundai i.e., Hyundai and Cadogan Petroleum go up and down completely randomly.
Pair Corralation between Hyundai and Cadogan Petroleum
Assuming the 90 days trading horizon Hyundai Motor is expected to under-perform the Cadogan Petroleum. In addition to that, Hyundai is 4.15 times more volatile than Cadogan Petroleum plc. It trades about 0.0 of its total potential returns per unit of risk. Cadogan Petroleum plc is currently generating about 0.0 per unit of volatility. If you would invest 240.00 in Cadogan Petroleum plc on August 30, 2024 and sell it today you would earn a total of 0.00 from holding Cadogan Petroleum plc or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hyundai Motor vs. Cadogan Petroleum plc
Performance |
| Timeline |
| Hyundai Motor |
| Cadogan Petroleum plc |
Hyundai and Cadogan Petroleum Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hyundai and Cadogan Petroleum
The main advantage of trading using opposite Hyundai and Cadogan Petroleum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hyundai position performs unexpectedly, Cadogan Petroleum can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Cadogan Petroleum will offset losses from the drop in Cadogan Petroleum's long position.| Hyundai vs. Ondine Biomedical | Hyundai vs. Europa Metals | Hyundai vs. Lendinvest PLC | Hyundai vs. Neometals |
| Cadogan Petroleum vs. Lendinvest PLC | Cadogan Petroleum vs. Neometals | Cadogan Petroleum vs. Coor Service Management | Cadogan Petroleum vs. Albion Technology General |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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